Gamboa v. Teves etal., GR No.

176579, October 9, 2012

Facts:

The issue started when petitioner Gamboa questioned the indirect sale of shares
involving almost 12 million shares of the Philippine Long Distance Telephone Company
(PLDT) owned by PTIC to First Pacific. Thus, First Pacific’s common shareholdings in
PLDT increased from 30.7 percent to 37 percent, thereby increasing the total common
shareholdings of foreigners in PLDT to about 81.47%. The petitioner contends that it
violates the Constitutional provision on filipinazation of public utility, stated in Section
11, Article XII of the 1987 Philippine Constitution, which limits foreign ownership of the
capital of a public utility to not more than 40%. Then, in 2011, the court ruled the case in
favor of the petitioner, hence this new case, resolving the motion for reconsideration for
the 2011 decision filed by the respondents.

Issue: Whether or not the Court made an erroneous interpretation of the term ‘capital’
in its 2011 decision?

Held: The Court said that the Constitution is clear in expressing its State policy of
developing an economy ‘effectively controlled’ by Filipinos. Asserting the ideals that
our Constitution’s Preamble want to achieve, that is – to conserve and develop our
patrimony , hence, the State should fortify a Filipino-controlled economy. In the 2011
decision, the Court finds no wrong in the construction of the term ‘capital’ which refers
to the ‘shares with voting rights, as well as with full beneficial ownership’ (Art. 12, sec.
10) which implies that the right to vote in the election of directors, coupled with
benefits, is tantamount to an effective control. Therefore, the Court’s interpretation of
the term ‘capital’ was not erroneous. Thus, the motion for reconsideration is denied.